Kerry Group Reports Q3 2023 Sales

Kerry reported revenue in the first nine months of the year decreased by 4.2%, reflecting business volume growth of 0.4%, pricing of 1.3% and a contribution from acquisitions of 1.1%, more than offset by the effect of disposals of 5.1% and adverse translation currency of 1.9%. Kerry's EBITDA margin increased by 10bps as benefits from cost efficiency initiatives and portfolio developments were partially offset by the mathematical impact of passing through overall input cost inflation. Below are segment sales highlights.

Taste & Nutrition

• Overall volume growth of 1.5% with Q3 growth of 1.6%
• Meat, Snacks and Dairy markets achieved good growth
• Pricing of 3.0% with third quarter pricing of -1.4% reflective of some input cost deflation
• EBITDA margin +20bps (Q3 +130bps) primarily reflected benefits from cost efficiencies and portfolio developments, partially offset by the mathematical impact of passing through overall input cost inflation

Americas Region

• Overall volumes -1.7% (Q3 -0.9%) with improvement in North America in Q3
• Retail channel saw softer market conditions while foodservice performed well
• Good growth in Snacks and Dairy markets
• LATAM achieved overall growth despite softer Q3 market conditions

Europe Region

• Overall volumes +3.7%, with Q3 growth of 2.0% in line with expectations
• Volume growth led by Meat, Snacks and Meals markets
• Growth driven by strong performances in UK and Ireland

APMEA Region

• Overall volume growth of 7.5% with continued strong Q3 growth of 8.2%
• Volume growth led by Meat, Meals and Dairy markets
• Growth was strong in the Middle East and South Asia Pacific

Dairy Ireland

Performance Impacted by Significant Reduction in Dairy Prices

• Volumes -6.2% (Q3: -12.1%) as challenging industry dynamics persisted
• Pricing -6.5% (Q3: -17.6%) relating to increased deflationary market dynamics across the period
• EBITDA Margin -110bps driven by the significant impact from changes in dairy market prices

Financial Review

At the end of September, the Group’s net debt was €1.8 billion. Kerry’s consolidated balance sheet remains strong, which will support the continued strategic development of the business.

Share Buyback Program

Kerry announced it will commence a share buyback program of up to €300 million of Kerry Group plc ordinary shares. Kerry is said to commence the share buyback program at the beginning of November 2023, and an announcement will be made immediately prior to its formal launch.

Board Changes

The Board appointed Genevieve Berger, Ph.D., and professor Catherine Godson as non-executive directors of Kerry with effect from November 1, 2023.

Edmond Scanlon, chief executive officer, Kerrycourtesy of KerryEdmond Scanlon, chief executive officer shared, “We delivered a good overall performance in the period recognizing varying conditions across our markets. North America saw good improvement through the third quarter, Europe performed in line with expectations while APMEA continued to deliver strong growth. Our unique positioning in foodservice supported our continued strong growth in the channel.

We made good strategic progress through the period with further footprint expansion and strategic acquisitions, and given the Group’s strong balance sheet and cash flow, we are also initiating a share buyback program.

Taste and Nutrition remains strongly positioned for volume growth and margin expansion while recognizing current market conditions, however Dairy Ireland performance continues to be impacted by challenging industry dynamics. Given this context, we expect our constant currency earnings growth to be at the low end of our guidance range.”